Rentech Announces Agreement to Sell Alternative Energy Technology Assets
Exit from Alternative Energy Technologies Business to be Completed in 2014
Rentech, Inc. (NASDAQ: RTK) announced March 5, 2014 that it has entered into a definitive agreement with Sunshine Kaidi New Energy Group Co., Ltd. (Kaidi) to sell its alternative energy technologies and decommissioned Product Demonstration Unit (PDU). Rentech will now focus on it´s activites in the wood fibre business through the fully owned subidiary Fulghum Fibre Fuels and the development of it´s wood pellet business. The company also have a nitrogen fertilizer sector through it´s publically noted subidiary Rentech Nitrogen Partners, L.P. (NYSE: RNF).
The transaction calls for an initial cash payment to Rentech of $15.3 million, and the possibility of a success payment of up to $16.2 million to the Company upon the successful construction and operation by Kaidi, at its cost, of a demonstration-scale plant in China utilizing the technologies and PDU equipment acquired from Rentech. The equipment purchased by Kaidi will be relocated to Wuhan, China where Kaidi is in the process of expanding its biomass-to-liquids demonstration facility to employ some or all of Rentech’s alternative energy technologies.
“The sale of these technologies and the decommissioned PDU is the final step in exiting our alternative energy technology-related operations. We continue to focus on driving near-term and long-term growth in our wood fibre processing and fertilizer businesses,” said D. Hunt Ramsbottom, President and CEO of Rentech.
“We are pleased Kaidi has agreed to purchase these assets with plans to demonstrate and commercialize them in alternative energy projects abroad, as the energy landscape and lack of government support no longer make their deployment economic in the U.S. in the foreseeable future. We are grateful to all of our employees who helped develop such innovative and effective technologies.”
In 2013, Rentech ceased operations at the PDU and successfully mothballed the facility. Staffing in the Company’s alternative energy business was also significantly reduced and all related research and development activities were eliminated.
The sale of the technologies is expected to close in mid-2014. Closing of the transaction is subject to customary conditions, including regulatory approvals in the United States and the People’s Republic of China.
About Rentech, Inc.